University of Virginia Library

II. APPENDIX II

WANG MANG'S ECONOMIC REFORMS

The economic changes made by Wang Mang constitute one of the very
interesting experiments man has made with his social environment. In
studying these reforms, we must recognize that they sprang from the
Confucianism of that age. While Wang Mang was himself interested in
changing government institutions—he liked nothing so much as to show
his superiority by bringing about an improvement—yet the crucial test
of any proposed change was whether it was classical, i.e., whether it had
been practised or approved by some of the sages, as their deeds and
sayings were recorded in the Classics and interpreted by the scholarly
traditions of the time, handed down in the various schools. Wang Mang
had moreover added certain books to the official Confucian canon: the
Tso-chuan, the Chou Offices, the ancient text (since lost) of the Book of
History, the lost chapters of that Book, etc. (99 A: 19a). The Chou Offices,
for example, seems to have been prepared, in part at least, by idealistic
Confucian antiquarians, who, consciously or unconsciously, wrote into
the past their own conceptions of an ideal government. In these new
canonical books there were naturally many traditions concerning economic
matters. Wang Mang had acquired his popularity among the
intelligentsia, which had brought him to the throne, by his complete conformity
to Confucian ideals; when he ruled in person, he was then obligated
to put into practise these Confucian ideals. Wang Mang was, first
and foremost, a complete Confucian; the credit for his remarkable reforms
must be given rather to the Confucian literati than to him.

Wang Mang was also a scheming courtier who wormed his way into
power by clever intrigue. He came of a clan that had enriched itself,
beyond all other clans, through imperial grants and through profiting from
the perquisites of power. While Wang Mang himself held his acquisitive
propensities severely in check, in order to appear liberal (99 A: 1b), yet
at heart he was grasping and stingy (99 C: 1b). Hence he saw to it
that his reforms benefited the throne. In his rule, he showed himself
callous to the true interests of his people, with the result that their
economic condition deteriorated, until, as a result of misgovernment, oppression,
famine, banditry, and civil war, the population was reduced
by half (24 B: 27a).

Such a result was however quite contrary to Confucian idealism, which

was sympathetic with the people. To Confucians, it was axiomatic that
all reforms which accord with the Classics will benefit the state and the
people. Consequently, when any of Wang Mang's reforms brought discontent
and economic disorganization, the conclusion was drawn that it
was not really classical. Wang Mang did not follow classical precedents
slavishly; he improved on them. The tradition was that King Wen had
coined two denominations of money (24 B: n. 21.2), so Wang Mang instituted
twenty-eight denominations (24 B: 23a), only later reducing them
to two. Wang Mang found the word "controls (kuan)" in the Classics
(24 B: 23b), whereupon he used this word as a justification for his monopolies;
later, when these monopolies were seen to have oppressed the
people, the term "controls" was interpreted otherwise and monopolies
were held to be unclassical. As a result of Wang Mang's failure, Confucianism
was not discarded by many intelligentsia, it was merely reinterpreted;
the Later Han dynasty was at first more Confucian than the
Former Han. But sceptical thinkers (even some members of Wang
Mang's own clan, such as Wang Chi7 [a distant cousin, cf. HHS, Mem. 9:
1a]) began now to be repelled by Confucianism and were attracted to
Taoism, so that at this time there began the re-emergence of this doctrine
after a century of almost total eclipse. Wang Mang's own grasping
nature was an important reason for the failure of his reforms, in spite of
their Confucian nature.

We shall consider his economic changes in the following order: (1) his
monetary reforms, (2) his policy regarding land and slavery, (3) his monopolies
and taxes, and (4) his attempt to speculate in staples and
to loan money.

His monetary reforms came soon after he became Acting Emperor
(A.D. 6). A tradition had been preserved that in Chou times, in order
to compensate for fluctuations of prices, there had been two denominations
of bronze coins, not merely one, as in Han times. (HS 24 B: 2b,
3a, 21a & n. 21.2). This tradition made varied coinage a Confucian
practise, since a fundamental Confucian principle was the imitation of
the ancient sages. Wang Mang accordingly coined four denominations
of bronze coins, with the values of 1, 50, 500, and 5000 cash. The first
two denominations were round cash; the latter two were in the form of
knives. The fifty-cash coins had only 1/20 as much metal per cash as
the one-cash coins, and the others were proportionately lighter (about
1/100 and 1/625 as much metal per cash as the one-cash coins), so that there
was much profit for the government in this coinage. In its early years,
the Han dynasty had experimented with depreciating the coinage, but
there had arisen opposition to that practise, and, for the last century and

a quarter, there had been no change in the weight of coins, so that the
evil effects of this depreciation were probably not anticipated. One result
was a great increase in counterfeiting.

In addition, Wang Mang "nationalized" all gold, that is, he permitted
only vassal kings to possess actual gold, other nobles and people being
required to bring their gold to the Emperor's wardrobe, where they were
to be given its value in bronze cash. Pan Ku states that they were not
given its full value. Very probably they were paid in light-weight knife-coins
of high denominations. Thus Wang Mang made much profit out
of manipulating coinage and gold.

When in A.D. 9, Wang Mang became titular emperor and established
his own dynasty, he had to do away with the knife-coins, because the
Chinese word for knife, [OMITTED], forms part of the word Liu [OMITTED], the surname
of the Han dynasty. Since a change in currency was thus necessary,
he first did away with the knife-coins, only two denominations remaining
(A.D. 9), and later (A.D. 10), added other denominations to make twenty-eight
in all. Sixteen of these were of bronze. The others, in gold, silver,
tortoise-shells, and cowries, were not coined, so that this legislation
amounted to fixing a price for these four articles.

An important motive in this bronze coinage was undoubtedly to make a
profit for the government. We are informed concerning the weight and
value of each denomination (24 B: 21a-23a). The light-weight fifty-cash
pieces were retained, but the heavy one-cash pieces were replaced by new
cash weighing only one-fifth as much as the former one-cash pieces. The
higher denominations were in the shape of trousers-cash or spade-money.
The weights of these bronze coins were so arranged that the one-cash
pieces contained proportionately the largest amount of metal, each higher
denomination containing proportionately less metal, until the highest
denomination, that of a thousand cash, contained only 2.4% as much
metal per cash as the one-cash pieces (cf. 24 B: n. 22.11). This coinage
was thus an issue of metal fiat money. People who had previously used
the heavy one-cash pieces would hardly want to give them up in exchange
for the new light coins. In order to make the coins of large denominations
circulate, Wang Mang ordered that all persons who passed the likin
stations at the passes, fords, and elsewhere must show large spade-coins of
high denominations along with their passports; officials who used the
government posts or who entered the palaces, must also show spade-money
in order to be admitted (99 B: 15a). Since cash were cast, instead
of being struck, counterfeiting was easy and many people were
driven to it in order to preserve their wealth. To stop counterfeiting,
Wang Mang made the possession of copper and charcoal an offense (99 B:

7b). This law proved too drastic and was moreover ineffective; it was
consequently abolished in A.D. 13 (99 B: 22a). When the people refused
to use the new coins, Wang Mang issued an edict that all those possessing
the older heavy cash would be executed or exiled. Pan Ku says that as a
consequence farmers could not sell their produce nor merchants their
goods, and the common people wept in the market-places and highways,
while uncounted people and officials, even of the highest ranks, were
sentenced for crime (24 B: 23a).

When we note that the mere possession of the heavy coins was made a
crime, and that an informer was given half of the illicit wealth seized as
a result of his information, we can well believe Pan Ku's statement. In
order to maintain a semblance of authority over the coinage, Wang Mang
had to abandon all but two denominations of these new coins, and retain
only the light one-cash pieces and the fifty-cash pieces (24 B: 23b).

Some years later (A.D. 14), Wang Mang again changed the coinage.
The light-weight one-cash pieces had probably so disarranged prices that
there had been a loud clamor for the restoration of the previous heavy
cash. The people had been paying taxes in the light cash, and the officials
had probably found that taxes and their salaries (which were payable
half in coin) did not yield as much value as previously. The former
coinage was therefore abolished and the previous heavy one-cash pieces,
weighing five times as much as the light one-cash pieces, were restored.
But the light one-cash coins were not exchanged for the new heavy cash;
they were merely dropped. The one-cash pieces in circulation were thus
demonetized. An edict was issued which declared that the previous
fifty-cash coins (weighing two and one-half times as much as the new
large one-cash coins) were to be worth as much as one of the new one-cash
pieces (24 B: 26b), i.e., the government would take a former fifty-cash
coin in place of a new one-cash coin.

The people were given six years in which to make this change; after
that time, possession of the former fifty-cash pieces was to be forbidden.
The result may easily be imagined. A person who had any large amount
of money in fifty-cash pieces and who used it in accordance with the law,
lost 49/50 of his money. What he had in one-cash pieces became worth
only so much metal. Few people could afford to make the exchange.
By melting down cash, on the other hand, a person may have lost comparatively
little, for cash were then probably worth approximately their
weight in metal. All that was needed was new cash to use as models,
clay for moulds, and a charcoal stove to melt the coins. It is not surprising
that counterfeiting became ubiquitous. To stop it, people were
grouped in lots of five families, who were responsible for each other; if one

family was caught counterfeiting, all five families were punished. So
many people, however, violated the law that the punishments could not
be carried out. Wang Mang had to lighten the punishment for counterfeiting
to enslavement of the counterfeiter to the government, together
with his wife and children and those in his group of five families. These
unfortunates were transported to the mint at the capital to work out
their sentences. Pan Ku states that six or seven out of every ten died
from the hardships and suffering (24 B: 26b).

There were also coined new twenty-five-cash pieces (in the shape of
trousers-cash or spade-money), which contained one-fifth as much metal
per cash as the new one-cash pieces. Thus the former principle was continued,
of profiting by coining light-weight pieces of high denominations.
Light-weight coins of high value would be a boon to anyone who must
transport money, if their value could be maintained. But there is no
evidence that the government did anything to maintain their value. The
fact that the coins of high denominations in the second coinage were
dropped and that the coins of high value in the third coinage were only
twenty-five-cash pieces, instead of fifty-cash pieces as in the first coinage,
would seem to indicate that the value of these coins was not maintained
and that they depreciated in usage.

We must resort to inference in order to determine the precise economic
effects upon Chinese society of Wang Mang's three changes in coinage
and his nationalization of gold. The latter decree probably succeeded in
mulcting the wealthy, especially the Han dynasty's nobility, who were
the only persons likely to have possessed much gold. They needed gold
for their yearly contribution to the throne (HFHD II, 126-128). Since
Wang Mang allowed the highest nobles (the vassal kings) to retain their
gold, he did not, even in A.D. 6, take gold completely out of circulation;
the enactment of A.D. 10, which made gold one of the articles of currency,
rescinded the prohibition against possessing gold.

At that time, gold was not coined, but circulated in the shape of square
cakes an inch (0.9 in., Eng. meas.) on a side and weighing a catty (then
7.84 oz. troy, 244 g.; HFHD, I, 280). Such a catty of gold was worth
ten thousand cash; imperial grants of gold were usually transmitted in
terms of their equivalent in bronze cash. Ten catties of gold was the
value of the property belonging to a median family (HS 4: 21a). By
exchanging depreciated inlaid bronze knife-coins for actual gold, Wang
Mang deprived all but his highest nobles of much of their wealth. His use
of such knife-money in making grants saved him about 99.8% of the
metal he would otherwise have disbursed. For the first three years after
their gold had been taken away, the nobles probably did not feel the

loss—they merely paid their annual required contribution in the form of
gilded knife-money. When, however, in A.D. 9, these knife-coins were
demonetized and suddenly became worth only their value in metal, the
nobles found themselves mulcted and had to get rid of these knife-coins
to show their loyalty to the new dynasty. Thus, by a clever trick,
Wang Mang deprived the Han dynasty's nobility of much their wealth,
before he dismissed them and set up his own nobility.

Wang Mang seems to have hoarded most of the gold he obtained. He
was miserly, and failed to use his treasure, even in emergencies (cf. his
payment to soldiers, 99 C: 25b). Pan Ku reports that when Wang Mang
was finally killed, he still had much treasure. Ten thousand catties of
gold made a chest and there were sixty chests of gold in the imperial
apartments, as well as several chests in other offices of the palace, besides
cash, silk, pearls, jade and valuables (99 C: 25a, b). This nationalization
of gold seems merely to have withdrawn much of the empire's gold from
circulation and to have concentrated it in the imperial palace. The nobles
had been given depreciated bronze coins, nominally of the same value,
but probably exchangeable in trade for far less, and these coins were
soon demonetized, after which time gold was again allowed to circulate.

Sixty chests of gold, if all the chests were full, would be 146,400,000
grams or 4,706,867 oz. troy. There were also "several chests" in each of
three other offices, so that the total amount, if correctly reported, must
have been about 5,000,000 oz. of gold. Where did this huge amount of
treasure come from? If the report is correct, it was a greater quantity
than the entire visible stock of gold in Europe of the middle ages, which
is estimated as not over 3,750,000 oz.[1]

The reliability of this report concerning the gold is probably quite high.
Pan Ku was too careful a historian to insert such a statement into his
account if he had no documentary source for it. He had no motive in
exaggerating Wang Mang's wealth. This statement probably came from
the report to the Keng-shih Emperor made in A.D. 23 by the captors of
Ch'ang-an. They may indeed have exaggerated their report of Wang
Mang's wealth. "Sixty" is a round number and so may not be exact.
But the captors would not have exaggerated very much, for they would
be held accountable if any large amount of treasure was missing. The
Wei-yang Palace, in which were located the inner apartments containing
this large treasure, was burnt in the attack upon Wang Mang, but Pan
Ku says specifically that the government treasuries were nevertheless
maintained intact (99 C: 29a). Proof that Wang Mang had possessed a

large amount of gold is also afforded by his betrothal present to the family
of his second wife, nee Shih, which was 30,000 catties of actual gold or
235,343 oz. (7,320,000 g.; 99 C: 20a).[2] Thus Wang Mang must at one
time have had about five million ounces of gold. China had never produced
any large quantity of gold;[3] whence could he have obtained all
this treasure?

It undoubtedly came to China in return for Chinese exports, the chief
of which was silk. Gold has indeed a tendency to form hoards. Siberia
was then the largest and nearest source of gold. Much of the gold
possessed by ancient oriental empires seems to have come from this region.
Parthia, Bactria, Sogdiana, and India produced little or no gold, although
Bactria was famed in ancient times for its gold.[4] An abundance of golden
articles has however been found in Scythian graves in South Russia and
Siberia. In the fifth century, the Massagetae, who were northern
neighbors of Bactria, had so much gold that they used it to make bits
and trappings for their horses.[5] Probably most of this gold came from
placer mining along the headwaters of Siberian rivers; even at the beginning
of the present century, the main Siberian sources were the washings
along the Lena and Amur. Possibly the Obi and Yenisei systems also
furnished gold; new gold fields are said to have recently been discovered
near the head waters of both rivers. Probably gold was obtained over a
very large area; Siberia is today asserted to have larger amounts of gold

than any other country.[6] There may also have been gold mines in the
Urals and Altai, but mining was so laborious in comparison with washing
that most of the gold probably came from the rivers. Anciently this
supply must have seemed inexhaustible.

The Chinese probably obtained a goodly share of this Siberian gold
by trade with their northern neighbors. Although these peoples did not
wear silk, yet their leaders would want it as an article of luxury; other
Chinese articles of luxury were likewise exported to these peoples. The
Chinese traded actively with the Huns and other northern neighbors
(except when they were at war with them) along the whole northern
border, and (at least during the first century B.C.) Chinese envoys
traveled regularly through much of southern Siberia, along with whom
went merchants, who took advantage of the envoy's escort and probably
paid his expenses.

Gold was also mined in Europe and possibly in Asia Minor. There
were important gold mines in Transylvania, where the Romans obtained
much gold.[7] Once silk became available, the Romans eagerly sought for
it, just as they imported large quantities of Indian spices and other goods.
In Wang Mang's time, the silk trade with Greek Asia and India via the
Tarim basin had been actively carried on for some centuries. We know
little of it before the time of Emperor Wu, but the fact that Chang Ch'ien
reported conditions in Bactria shows that before the Chinese conquered
the Tarim basin, trade was going on between the Greek orient and China.
After that conquest, with the establishment of peace, trade doubtless
increased several-fold. In 67 B.C., a Protector-General was established
for the Western Frontier Regions and in 48 B.C. the army of the Mou-and-Chi
Colonel was established there to maintain order.

At the same time, silk was becoming more and more popular in Rome.
Julius Caesar (d. 44 B.C.) is reported to have possessed silken curtains,
but the introduction of silk to Rome in quantities began only in the
reign of Augustus (27 B.C.-A.D. 14) and may be traced to Marcus
Antonius, who communicated with the Bactrians. Tiberius (A.D. 14-37)
censured the wearing of silk by both sexes and forbad its wearing by men.
Gaius (37-41) revived the wearing of silk, at least by the emperor. But
clothing made wholly of silk was rare until Elagabalus (218-222) set the
example, this material normally being woven into linen or woolen fabrics
after importation. At the same time that they were using silk, the

Romans were importing much larger quantities of goods from India;
Pliny says that at the lowest computation, India, Seres, and Arabia
drained from the Roman empire a hundred million sesterces (over five
million dollars-worth) annually, more than half of which went to India.[8]
Thus wealthy Romans began to use a certain amount of silk in the last
century of the Former Han period; in the time of Wang Mang, sumptuary
legislation was enacted against it, and in Later Han times its use became
common among the wealthy.

Before silk became sought after in Rome, its use had probably become
likewise popular in the kingdoms of central and western Asia and in India.
As early as the time of Emperor Wu, traders were taking silk to India
by sea (HS 28 Bii: 68b); this sea-borne trade seems however to have
represented a drain of gold rather than an accession of it. There was also
some trade to India via Yünnan and Burma. But these two routes can
hardly have carried any large quantities of trade; the geographical obstacles
were too great. The chief route of export was by way of the
Tarim basin, which led into Sogdiana and Bactria, and thence to India
or to the Mediterranean world.

It is doubtful whether there was much return trade to China in goods
by this route. The road was so long and difficult that only goods which
combined high value with small bulk would be profitable to carry. In
Europe, silk was worth its weight in gold. Some jewels (including pearls
from India) and a few Hellenistic works of art seem to have been all that
the Chinese imported. But their appeal was limited, so that large quantities
would hardly be carried to China. Hence the return trade was
largely in gold, which alone, together with silk, fulfilled the conditions
for profitable trade. Thus China may have drained the Hellenistic
Euthydemids of gold in the first century B.C., just as in the time of
Wang Mang the Roman use of silk threatened the Roman stock of gold.
It is an interesting fact that, although gold was mined in Europe, in late
antiquity, accumulated stocks of gold seem to have disappeared from
that region. Much of this gold found its way to India, but some must
have come to China. Large hoards of gold coins dating from Hellenistic
and Roman times have been found in India, but finds of such coins are
extremely rare in Chinese territory. Trade between the Roman empire
and India went direct; that between the Roman empire and the Chinese
seems only to have been carried by middlemen, until Later Han times.
The Chinese were furthermore accustomed to using gold in the form of
bullion squares, so that they melted down Greek and Roman coins. In
China there was a customary ratio between gold and cash (10,000 cash
to 1 catty of gold, 130 to 1). Wang Mang's stock of gold probably came

chiefly from Siberia, somewhat from Hellenistic Asia and India, and some
from Europe.

At the beginning of the Former Han period, gold seems to have been
used in China freely in exchange; imperial grants were frequently in
"actual gold." By the latter part of that period, actual gold seems to
have been used much less frequently. Probably the opening of the
copper mines in the lower Yangtze region and elsewhere had made bronze
cash so plentiful that even large sums were transferred in the form of cash.
In A.D. 3, Wang Mang was given 40,000,000 cash and 23,000,000 cash
as betrothal presents for his daughter (99 A: 10a). With large quantities
of cash available, it would have been natural that gold should have accumulated
in the treasuries of the wealthy, who were chiefly the nobles.
When Wang Mang demonetized gold, these nobles would have been especially
careful to deliver up their stores of gold, in order to avoid the
punishment (dismissal and confiscation) for retaining any of it. Thus
Wang Mang probably secured much of the gold in China, which country
had been draining gold from Asia and Europe.

The changes in the bronze coinage probably affected Han China much
less than a similar depreciation would have done in modern times. China
had already changed from a barter economy to a limited money economy.
The land tax was still payable in kind, but money was exacted for the
numerous other taxes. The salaries of officials were quoted in so many
piculs of grain, and were paid, half in grain and half in money (HHS,
Tr. 28: 14b, 15a). Poll-taxes, levied upon all adults and all children
over their seventh year, were in cash. Artisans and professional men
paid an income tax in money, (established by Wang Mang; 24 B: 24a, b).
The Han satrapies each sent an annual accounting to the imperial government,
and probably at the same time remitted a certain proportion
of the taxes they had gathered. Nearer commanderies remitted at least
a portion in the form of grain. We hear of corvée service for the transportation
of grain and of a special canal to Ch'ang-an dug for its conveyance.
Distant commanderies probably remitted cash or valuables.
An effort seems to have been made to transport to the capital no more
grain than was necessary to feed the people in that region. The capital
region had been irrigated, and had been one of the most productive areas
in the empire. Hence taxes could largely be remitted in money, which
had been used to purchase grain in the capital area. Each city had its
market-place (or bazaar); the capital had two. There was thus a large
sum of money in circulation for purposes of taxation and trade.

The farmers probably used very little money. They stored their grain
and used it themselves or sold small amounts in order to purchase articles

in the markets. The farmers who possessed money were probably only
those who had accumulated surplus wealth. The poorer people affected
by Wang Mang's changes in coinage were chiefly those who were in debt.
Interest rates were quite high. We have no way of knowing how many
farmers were involved in debt, for we hear nothing of farm debts. Since
merchants were prohibited from owning cultivated fields, they would
hardly lend money on farm land, for they could not foreclose such a
mortgage.

A real, though limited money economy was only a few centuries old
in the China of Wang Mang's time, so that a mortgage system may have
not yet developed. The only moneyed people besides merchants were
nobles and officials. Some decades previously, the Grandee Secretary,
Kung Yü, (d. 43 B.C.) had memorialized the throne that the court
officials should not be allowed to buy or sell or to make money off the
people, but this memorial had not been acted upon (HS 72: 14a). Hence
some wealthy officials did actually engage in business, but that procedure
was frowned upon and was not considered proper. There had been a
long-standing prejudice and prohibition against merchants entering government
positions.

The higher nobles undoubtedly considered it beneath their dignity to
engage in business. Some of the wealthier ones however maintained
"guests," i.e., persons of ability who came voluntarily to their house,
became part of their household, receiving support from them, and in return
executed various commissions for them. We hear of guests who
gave clever advice, of others who wrote books for their host, of still
others who avenged their host's feud, and even of guests who robbed for
their host, bringing their booty into his house and being protected by him.
Some nobles had guests who engaged in business for their hosts. But
here again the aristrocratic prejudice against merchants probably prevented
this carrying on of business by proxy from becoming a very
common practise.

We hear of one wealthy merchant who sent his slaves out to conduct
businesses (91: 10a), and of a wealthy family that lent money, but these
loans were to other merchants or artisans (91: 9b). When Wang Mang
established an office for making loans, his enactment implies that debts
were incurred chiefly for the performing of religious sacrifices (especially
burials) and for buying farm land or setting up businesses (24 B: 24b).
In an emergency, a certain wealthy man made loans to those newly
enfeoffed nobles who needed supplies for a military expedition against
rebels (154 B.C.; he exacted a tenfold repayment; 91: 11b).

But nowhere do we hear of any extensive loans to farmers, except those

made by the government in time of drought or calamity. The government
would sometimes settle landless people on vacant or newly opened
land, giving them seed, food, and oxen for plowing. They were expected
to repay these debts, but this provision was frequently waived by an
imperial act of grace. The only large farm debts may have been of this
variety; but on such debts, the government, if it wished, doubtless found
means whereby a change in coinage would not diminish its revenues.
Wealthy land-owners probably exacted their rents in terms of grain,
rather than money, as is still the case in rural China. Hence farmers
(except the wealthy ones) were probably little affected by the depreciation
of money.

Merchants and other wealthy persons (who were probably bureaucrats
or their descendants) were the ones who felt the deprecations of the
coinage, for they possessed most of the money not in the hands of the
government. The policy of the Han dynasty was to discourage trade and
foster agriculture in every possible manner. Trade was penalized drastically.
Merchants were considered parasites and were compelled to pay
larger taxes than farmers. They and their descendants were not ordinarily
allowed to hold official positions.

How far the depreciations of the coinage actually deprived merchants
of their wealth is difficult to determine. The extremely rich, settled
merchants, who had large establishments, probably found it possible to
melt down their cash promptly and recoin it into the new forms. They
may even had made money by the change, just as did the government.
Wealthy officials probably kept most of their property in the form of
goods or jewels. Those who suffered were the smaller merchants and
pedlars, who did not have facilities for counterfeiting, and whose small
shops could easily be watched. The worst suffering was among the unfortunates
who were caught counterfeiting; they were punished with their
innocent neighbors who had failed to report the crime. The chief effect
of the changes in coinage was probably the transfer of wealth from the
smaller merchants to some rich merchants and especially to the government.

Wang Mang had incurred great expenses, and his income was inadequate
for the government expenses. It was thus only natural that he
should have depreciated the coinage in order to secure money. Government
loans had not yet been thought of. The circumstances occasioning
the monetary changes and the nature of the changes in the coinages were
such that Wang Mang could hardly have had any genuine revolutionary
policy in mind—his purpose was probably to make money for the government
by a change in coinage which superficially had classical sanctions.

In his land policy, Wang Mang encountered similar difficulties. Population
had increased considerably during the peaceful years of the Han
dynasty. North China (then the only thickly populated part of the
country) is a region of periodic droughts and floods; many poor farmers,
unable to keep reserves enough to tide them over a drought, had been
forced to sell their hand in bad years, in order to get food. It had been
the policy of the Han government to maintain great granaries for famine
relief, to make loans to the poor, and to settle landless refugees upon
vacant lands. Nevertheless large holdings of land and tenancy had increased
and had long been a problem, because tenants could scarcely
accumulate the reserves necessary to tide them over a famine. A famine
year inevitably produced great hordes of vagrants, who died on the roads
and thronged into regions where there was food. Since the government
levied poll-taxes upon adults and children over seven years of age, in
addition to the land-tax, this vagrancy meant not only human suffering,
but also a great loss of income to the government.

In the year that he took the throne (A.D. 9), Wang Mang reformed the
tenure of land by establishing the ching [OMITTED] system (99 B: 8a, b; 24 A:
21a, b).[9] The Confucian tradition was that this system had been universal
in Chou times in all flat regions, and that other types of terrain
had been parcelled out proportionately (HS 24 A: 3a). According to
this system, an area one li or about 1350 feet square (Eng. meas.). was
divided into nine equal squares. One of the outer squares, containing
100 mou or about 4½ acres, was given to each of eight families to cultivate
for its own use. (For the size of the li and mou, cf. 99 A: n. 9.7.) Each
family also cultivated one-ninth of the central square (½ acre), the produce
of which was to be paid to the government in lieu of taxes. The remaining
ninth of the central square was reserved for houses and buildings.
Thus the farmer paid as taxes only one-tenth of his produce, and paid it
in kind, not in money. Land was moreover distributed according to the
needs of the people, so that one household, containing five persons and
one male worker, cultivated one unit. A youth received land in his
twentieth year and returned it to the government in his sixtieth year.
(Cf. Pan Ku's account, in HS 24 A: 2a ff.)[10]

This ching system looks excellent on paper; but its practical difficulties
make doubtful its use without changes over any large area. Land cannot
always be divided into exact squares; streams, hills, and roads interfere
with such a division. Five acres could not support a family except on
the best soil; Pan Ku, in describing this system (24 A: 2b), states that
two or three times as much land of the poorer varieties was necessary for
a family. A tax amounting to only a tithe of the produce would provide
very little for the officials in poor years, when they needed a larger income
than in good years. This sum was furthermore too small for the requirements
of a developed government, which maintained an expensive and
luxurious court, an elaborate bureaucracy with post-roads and post-stations,
a standing army, government schools, a government university,
etc., etc. Hence there had been added to the tax on land other taxes,
such as a regular conscript system, which required three days a month
service at the distant frontiers (regularly commuted to a money payment
for substitutes, who became a standing army). In addition, there were
heavy poll-taxes of various sorts. Tung Chung-shu said, in a memorial
to Emperor Wu (24 A: 16b), that farm tenants paid out five-tenths of their
income to their landlords. In Han times, money had come to be the
usual medium of exchange, so that the payment of all taxes in kind was a
special boon granted by the throne to the farmers only on special occasions,
when grain was extraordinarily low in price. Thus the ching
system seems to have been a dream of idealistic scholars; it had probably
been tried only in a restricted area and in much simpler times, and, if
applied literally, was quite impractical in a society like that of Han China.
(In recent centuries, it has been considered by orthodox Confucian
authorities as a practise suitable only for Spring and Autumn times.
That conclusion is however probably a consequence from the experience
of Wang Mang and others with this scheme.) The ching system had
however the great merit of doing away with tenancy and large land-holdings,
from both of which China suffered.

This system had great authority, for it had been urged by Mencius
(III, A, iii, 13-20; Legge, 243-5) and was said to have been the system
employed by the Confucian sages. Tung Chung-shu, the great Confucian
authority, had urged it upon Emperor Wu (24 A: 17a), and Shih1 Tan,

another Confucian, had urged it upon Emperor Ai in 7 B.C. (24 A: 20a),
probably because they felt that the land needed redistribution and taxes
were too onerous. Wang Mang, who had secured the throne because he
followed Confucian practises whole-heartedly, naturally ordered its
enactment.

In order to prevent any increase in tenancy, he at the same time nationalized
all land. He named all cultivated fields, "the King's fields, wang-t'ien
[OMITTED]," and ordered that they could not be bought or sold. Thus
farmers were deprived of the opportunity to alienate their land, even in
extremities. The amount of land that one family could hold was also
limited. A family containing nine adult males or less was allowed to
possess a maximum of 900 mou (102 acres or 41.5 ha.) of arable land; any
family with less than that number of adult males and more than that
amount of land must distribute its excess land to relatives or neighbors.
Thus land ceased to have any market-value and wealthy land-owners were
compelled to get rid of all but a small part of their land. Wang Mang
must have realized the extremely drastic nature of this reform and the
resentment it would arouse, for he added that anyone who dared even to
criticize the ching system would be exiled beyond the frontiers or suffer
execution.

At the same time, slavery, which had also been disapproved by Confucians,
was to be abolished. Tung Chung-shu had urged its abolition
more than a century previously (24 A: 17a). As a consequence of Shih1
Tan's proposals in 7 B.C., it had actually been ordered that vassal kings
might own only 200 slaves, marquises and princesses only 100 slaves, and
others only 30 slaves, but this law had been dropped and had never been
enforced (11: 3a). Wang Mang now produced a text from the Confucian
canon, which was interpreted to assert that slavery was lawful only for
the government, i.e., there should be no slaves except those in penal
servitude to the government. Private slaves were renamed "private
adherents [OMITTED]" and were not to be bought or sold.

The limitation of land holdings was a specifically Confucian measure.
Tung Chung-shu had advocated the limitation of the amount of land
that could be held by an individual (24 A: 17a). Shih1 Tan had repeated
that statement (24 A: 20b). When Emperor Ai had agreed, his officials
suggested that kings and marquises should be allowed unrestricted
amounts of private land within their kingdoms or marquisates; outside
these areas they should be restricted to 3000 mou (342 acres or 136 ha.).
It was also proposed that the number of slaves be restricted. The Emperor's
maternal relatives had however found this restriction inconvenient,
and prevented it from being put into effect (11: 3a; 24 A:20b). The

ching system and the limitation of land had the backing of Confucian
tradition and sentiment.

A customary practise, like the free ownership of land, cannot be changed
overnight. Land had been bought and sold freely in China for several
centuries. After Wang Mang's edict was published, it was but natural
that the wealthy should seek to convert their excess land and slaves into
money. Pan Ku reports that countless people, nobles, ministers, and
commoners, were sentenced for purchasing or selling land or slaves (99 B:
9a). It is not surprising that two years later the prohibition against
buying or selling land or slaves was rescinded (24 A: 21b).

In A.D. 17, a tax of 3600 cash per slave was levied upon all slave-owners,
including nobles (99 C: 1b). The intent of this tax was not to
eliminate slavery, but merely to obtain money. Since rich households
depended upon slaves for domestic service, this law bore chiefly upon the
wealthy nobles and high officials.

In the abolition of slavery and the restriction of land holdings, Wang
Mang was undoubtedly making a needed reform. It is possible that the
more thoroughgoing nature of this enactment, as compared with previous
proposals of the kind, indicates a genuine altruism on his part and a
desire to help the poor. The severity with which violations of his enactment
were punished may have also been merely a general characteristic
of his government. He very likely conceived of himself as altruistic.
The drastic nature of his enactments may however have been merely his
conception of the lengths to which a new and thoroughly Confucian dynasty
should go in carrying out supposedly ancient practises and an expression
of his sense of power. This latter supposal is moreover more in
harmony with the rest of his deeds. Certainly he seems to have shown
no pity for those who suffered from his reforms.

Since these reforms were all rescinded within two years, someone was
evidently able to bring so much pressure upon him that he had to revoke
this reform of land tenure and slavery. We are not told who it was, so
shall be compelled to resort again to inference.

No large part of the population in China has ever been enslaved except
by a general conquest. Slaves have rarely, if ever, been used for agricultural
work. Skilled artisans, who are able to make money by plying
their trades, tend to become freemen; free labor is more efficient than
slave labor and clever slaves purchase their freedom. Chinese slavery
was limited chiefly to domestic service and rough labor. The government
was undoubtedly the largest slave-owner; criminals were frequently condemned
to forced labor for a period of years or for life and were put to
work in the government offices. (C. M. Wilbur, Slavery in China During

the Former Han Dynasty, pp. 241-44.) The menial labor at the various
bureaux was performed by these slaves. Thousands of such enslaved
criminals were employed in the government iron and salt monopolies. A
capital sentence could sometimes be commuted, at the culprit's request,
to castration, whereupon he became a eunuch in the imperial palace—a
eunuch government slave. Many, perhaps most of the palace eunuchs
must have originated in this manner. We hear of thousands of slaves
in the imperial palace and occasionally even of a highly educated slave-girl,
such as Emperor Ch'eng's inamorata, Ts'ao Kung (HFHD, II, 369).
Government slaves were freed when their terms were completed. Government
slaves were sometimes bestowed upon imperial relatives or
favorites; occasionally at least, they were sold (Wilbur, op. cit., p. 446).
There may have been hereditary slaves, but there is some evidence that
children of slaves were automatically free, at least by the fourth generation,
unless (as must have very commonly been the case) they were, as
children, sold or given into slavery by their parents, in order that they
might be reared. The Huns captured large numbers of Chinese in their
raids upon the borders; these people were often sold, many, in all probability,
to Chinese. The slave-market was however chiefly maintained
from children sold by their poor parents or from children or adults
kidnapped by powerful people (perhaps given actually unjust, but
technically legal sentences of enslavement). Criminals who were enslaved
by the government would rarely be of high caliber and would be
suitable chiefly for rough labor; for entertainers and other trained domestic
slaves, the nobles and wealthy had to depend chiefly upon the
slave market.[11]

Outside the government service, the largest number of slaves were in
the noble houses. The nobles maintained slaves as entertainers as well
as domestic servants. Rich merchants also had such slaves; sometimes
slaves were used for manufacturing. The prohibition of the sale or
purchase of slaves would have limited severely the supply of high quality
domestic slaves and it would have made the government the only remaining
source of slaves. At the time, it produced little immediate change,
except among merchants who had bought slaves for resale. We may well
conclude that it was Wang Mang's nobles, probably his close relatives,
who persuaded him to rescind this measure, for these nobles would have

found it impossible to replenish the high quality slaves in their households.
Since the revocation came so soon, the measure had a negligible effect
upon slavery.

Just how Wang Mang put the ching system into effect is not told.
He could not cut the land up into regular squares; probably he did not
change the boundaries of fields, but merely limited to 900 mou the amount
of land one family might possess. The Han land-tax was one-fifteenth,
so that the introduction of the ching system probably meant an increase
in the land tax to one-tenth. The other taxes, such as the poll-tax on
adults, (suan), the poll-money (levied on children), the military taxes (fu),
likin duties (collected at the Wu Pass and probably at the other passes),
were probably continued. Then the actual effect of the ching system
was very likely limited to prohibiting the sale of cultivated land, limiting
land holdings, and an increase in the land tax.

The ban on selling cultivated land was probably a benefit to the poor
farmers. It prevented them from losing their land in time of drought.
Hence they were compelled to fall back upon the government for relief
and to become vagrants when that relief was not available. We are not
told about any mortgages upon farm land. This prohibition of the sale
of farm land merely fixed the existing farm population upon the farms
they then occupied. It was rescinded within two years and so had little
actual effect.

The limitation of the amount of cultivated land that could be owned
by a single small family was plainly an attempt to diminish tenancy and
distribute the land more widely among the people. It only affected large
land-owners. These large land-owners were chiefly the bureaucrats and
nobility (these two classes were largely identical, since the Han nobilities
had been mostly discontinued and Wang Mang's nobles were his relatives
and officials); merchants were not allowed to own farm land. The reason
that the nobles would wish to own large private farm estates requires
explanation.

The Han dynasty's full marquises (which Wang Mang replaced by four
degrees of nobility: marquises, earls, viscounts, and barons) all had their
noble estates located outside of Kuan-chung (the capital region, roughly
the present central Shensi), some at considerable distances from the capital—in
the present southern Honan, Hunan, Shantung, or Hopei. The
nobles had little control over their fiefs; these estates were managed by
chancellors, who were appointed by the central government; in practise,
nobles received merely the income from these estates in the form of 200
cash per household or its equivalent in grain, out of which they had to
pay their annual contributions to the imperial court (91: 6a). But the

transport of grain or even of bronze cash from a distance to the capital
presented difficulties because of banditry, and sometimes cost more than
the value of the grain itself. It may have been impossible to make
regular deliveries to the capital from the noble estates, because of the
distance. Most of the nobles, moreover, lived at the imperial capital,
Ch'ang-an, the center of culture, civilization, and political power. Hence
it became the practise for such nobles to purchase private land in Kuan-chung,
the income of which they used for their expenses. Such neighboring
lands could be watched, and rents brought to the capital with ease.
The largest private land-owners were the same rich nobles who had large
numbers of slaves. Wang Mang's uncles are described as having, at the
time of Wang Mang's childhood, "several tens of concubines in their
harems, slaves by the thousands or hundreds, musicians, singers, actors,
dogs, horses, large residences with earthen mountains inside, cave gates,
high verandas and pavillions, double passage-ways," etc. (98: 7b). To
keep up such extravagent establishments, large estates were essential.

Wang Mang did not interfere with the feudal estates of his nobles,
he merely required them to distribute their excess private fields among
their relatives or neighbors. It would not have been difficult for some
nobles to find members of their clans to take these excess cultivated fields,
manage them, and remit part or most of the proceeds to the original
owner. There was, however, the danger that these new owners would
cease paying rents to the original owner. Those nobles who could not or
would not use such subterfuges and who did not have adequate official
salaries would be compelled to retire from the court to their feudal estates.
That meant, however, leaving civilization to live in the "sticks," the
abandonment of one's social life and of the source of political perquisites.
Exclusion from the capital was a penalty considered more severe than
dismissal from office; it was visited upon officials who had become obnoxious
to the court. Wang Mang had suffered three years of such exile
and knew its bitterness; his intimates and the members of his clan probably
reminded him of the suffering he was preparing for them and of the
ease with which certain nobles were circumventing his enactment. So
much pressure was brought upon him (in all probability, practically the
whole court, except the conscientious Confucians, were unanimous in this
matter) that he had to rescind his enactment. In the end, this reform of
land tenure amounted to nothing.

We can only speculate concerning Wang Mang's motive in attempting
to alter land tenure. He might have been moved by compassion for the
miserable condition of the peasant farmers, but in my opinion, any such
attitude on his part is doubtful. He did not commonly indulge in compassion;

his great increases in taxation would seem to preclude any real
concern for the poor. His concern was rather to carry out Confucian
policies. The ching system was one of the outstanding Confucian economic
policies; if he had not attempted to put into practise a policy
recommended by Mencius, Tung Chung-shu, and other outstanding
Confucians, he would have appeared lukewarm, so that one important
source of his unusual popularity would have been gravely undermined.
Statecraft and ambition, not compassion, were his driving ambitions.

* * *

The third group of economic measures enacted by Wang Mang were
the six monopolies (established A.D. 10; 99 B: 12b; C: 1b) and increased
taxes. Government monopolies were by no means new in China. More
than half a millennium earlier, in the first half of the seventh century
B.C., Duke Huan of Ch'i is said to have made himself powerful through a
government monopoly in the manufacture of salt and iron. (Maspero
rejects this tradition; Karlgren defends it.) The Ch'in dynasty, which
first unified China under a single government, continued these two
monopolies (24 A: 16b). Emperor Wen (180-157 B.C.) had allowed the
common people to evaporate salt, smelt iron, and coin money (Discourse
on Salt and Iron, Gale, p. 28), but Emperor Wu had withdrawn these
privileges. Tung Chung-shu had protested against these monopolies
without avail (24 A: 17a). In the famous discussion of 81 B.C. (reported
in the Discourses on Salt and Iron), when the economic policies of the
government were reviewed, the Confucian literati likewise protested
against these monopolies (HS 7: 5a). In 44 B.C., Emperor Yüan, who
was attempting to be a good Confucian, abolished these monopolies, but
the loss of revenue compelled him to reestablish them three years later
(41 B.C.; HS 9: 6b, 9a). Confucianism in general opposed government
monopolies, so that these measures can hardly be said to have been
Confucian. Wang Mang, however, found references in Confucian literature
to something called controls or kuan, [OMITTED] or [OMITTED], so he changed the
name of these monopolies to "controls," and continued them as Confucian
enactments. He needed money too much to dispense with them.

A third monopoly was that in fermented liquors. Originally established
by Emperor Wu in 98 B.C., it had been abolished in 81 B.C., because
of popular criticism. The people were then permitted to brew
liquors upon payment of a tax. A high official of Wang Mang produced
texts from which one could infer that a government monopoly of liquor
was an ancient institution approved by Confucius; he pointed out to
Wang Mang that a 70% profit could be made in brewing and selling
liquor (24 B: 25a, b). Wang Mang therefore included it as one of his

"controls," and established it as another government business.

A fourth monopoly was that of coinage, which probably included the
mining and smelting of copper. In this enterprise, Wang Mang was
continuing a long-standing Chinese practise. In 175 B.C., Emperor Wen
had indeed allowed free coinage (4: 12b), but the consequent depreciation
of the currency had caused his son, Emperor Ching, to rescind this
privilege in 144 B.C. and to establish a death sentence for counterfeiting
(5: 7b).

The fifth monopoly was concerned with the products of the mountains
and marshes; these included forestry, fishing, hunting, and the taking of
other wild products, such as wild honey, etc. Such occupations had been
the resource of the poor in ordinary times and of all in time of famine.
(The mining of copper and or iron were probably included in the monopolies
of coinage [which was of bronze] and of iron, respectively.) For these
monopolies too, Wang Mang could cite classical texts. The Chou Offices
mentions a Forester of the Mountains [OMITTED], whose duty it was to enforce
the prohibitions concerning these regions, keeping people out of the
forests at improper times. He had a subordinate who collected the
revenue from the forests. Thus it is implied that there had been a tax
upon those who cut trees. This book also lists a Forester of the Marshes
[OMITTED], who had the local people go into the marshes and waters at the
proper times to take the articles of those places, delivering the proper
amount to the imperial treasury (as a tax) and keeping the rest for themselves
(Chou-li 16: 6b-8b; Biot, I, 370-375). Li-ki III, iii, 11 (Legge,
I, 227; Couvreur, I, 293) says, "Anciently, [people] went into the forests
at the foot of the mountains and the waters of the marshes at the [proper]
seasons without being prohibited," in which statement the qualification
"at the proper seasons" implies that there were prohibitions against
cutting trees at certain seasons of the year (Chou-li 16: 7a [Biot, I, 372]
specifies spring and autumn), and so implies a government supervision
of these regions with an impost upon those working there, to support
that supervision. Elsewhere, the Li-chi (IV, i, iii, 12; iv, ii, 21; Legge,
I, 265, 301; Couvreur, I, 350, 396) mentions a Forester of the Wastes
[OMITTED] and a Forester of the Waters [OMITTED], whose duties were to prevent
the cutting of trees at certain times and to collect the revenues from
rivers, springs, ponds, and meres. Thus there was ample classical precedent
for a taxation of forests and marshes. Wang Mang merely broadened
these precedents into a government monopoly and made it cover
all forests and marsh products.

The Ch'in dynasty had actually made the rivers, marshes, mountains,
and forests a government monopoly (24 A: 16b). In Han times, the

revenue from the mountains, streams, parks, ponds, market-places, and
shops had been reserved for those overlords who were enfeoffed as their
private estates with the regions containing these places, such as kings,
marquises, baronets, and princesses. From regions not given in fief,
this revenue was reserved for the imperial private purse, in charge of the
Privy Treasurer, and was not put into the imperial public treasury, in
charge of the Grand Minister of Agriculture (HS 24 A: 9b = Mh III,
541 f). The Privy Treasurer could hardly supervise these regions
throughout the empire, hence it is probable that, except for certain areas
near the capital, especially Kuan-chung, which he could conveniently
supervise, the mountains and waters in most of China had been actually
free to the people. Hunting had been prohibited in the imperial parks,
which were hunted and fished by government agents; it may not have
been restricted elsewhere, especially outside Kuan-chung. Wang Mang
seems then to have extended systematically throughout the whole country
the Ch'in and Han practise of taxing mountains and waters, and to have
made all the occupations related to forests and marshes government
monopolies, permitted only to those who paid certain fees. (Possibly
only certain of such occupations had previously been taxed.) In A.D. 22,
in a time of famine, the mountains and marshes were freely opened to
the people (99 C: 17b), possibly because they could not be kept from
utilizing these resources.

Detailed laws were made for each of these monopolies; the penalties
for violation were as severe as death (99 C: 1b), in which latter respect too,
Wang Mang was following classical precedent—Chou-li 16: 7b mentions
execution [OMITTED] in this connection (Biot, I, 374 softens this word to "châtiments").
These monopolies were opposed. When the Communicator
(the state treasurer), Feng Ch'ang, remonstrated against them, Wang
Mang became extremely incensed and summarily dismissed him from
office (99 C: 2a). There had been successive years of drought, and there
was much banditry. In A.D. 18, a new governor, Fei Hsing, was appointed
for a province in the Yangtze valley. When asked what would
be his plans upon reaching his province, he replied that these people
made much of fishing; the monopolies and taxes on the mountains and
marshes had taken away peoples' profits, so that they were starving; he
would summon back to farm land those who had taken to banditry and
would exempt them from taxes, loan them seed and food, and thus bring
peace to the region. Wang Mang was incensed at the covert criticism of
his monopolies and dismissed Fei Hsing (99 C: 2b, 3a).

The economic effect of these five monopolies was chiefly to raise and
stabilize the price of certain necessities. This objection had been made

to monopolies by the Confucians in the famous debate of 81 B.C. They
said that the price of salt had become so high that people had to forego it,
and that the iron implements made by the government manufactories
were inferior and unsuitable. Similar objections were made to the liquor
monopoly. The effect of these three monopolies, together with coinage,
was, indeed, to put into the hands of the government the most profitable
manufacturing enterprises of the time. Only the monopoly in liquors
was new in the time of Wang Mang. Its effect was to take away the
livelihood of those merchants who had engaged in brewing and liquor
dealing, except for those who now became government agents. It probably
also raised the price of liquor to the common people. There was
no thought of restricting its use. The abuse of alcoholic liquors has
rarely become an important problem in China.

The effect of the fifth monopoly, that on the mountains and marshes,
was to deprive of their livelihood the country's poor, who had engaged
in hunting and fishing, or to compel them to pay for the privilege of
continuing their occupations. These monopolies constituted an additional
tax upon the poor.

As a whole, these monopolies were thus means of obtaining additional
revenue for the government. I can find no other purpose in them. They
were a burden upon the poor and common people, since they were a tax
upon necessities. They could be counted on to bring in revenue, and
were in no sense revolutionary.

This policy of mulcting the people for the benefit of the government
also showed itself in Wang Mang's new taxes. A special tax upon
merchants and artisans had previously been attempted by Emperor Wu
(119 B.C.), compelling them to testify to the total amount of their
property and to pay a tax of 9½% and 4¾% respectively, upon their
capital (HFHD, II, 65, n. 15.13; 24 B: 13a, b). This tax had, however,
soon been abolished (24 B: 20a).

In A.D. 9, Wang Mang imposed an income tax upon all hunters,
fishermen, sericulturalists, artisans, and professional men. They were
each to testify to their income for the year, and pay a tithe of it as a
tax. Those who refused to testify to their income or who testified falsely
were to be sentenced to a year at penal servitude (24 B: 24b). At the
same time, it was ordered that all uncultivated fields, whether inside or
outside the city, should pay three times the usual land tax. This latter
provision was taken from the classical Chou-li (13: 9a; Biot, I, 279f; HS
24 B: 24a & n. 24.3). Wang Mang moreover attempted to systematize
the previous practise, begun by Emperor Hsüan (8: 6b & n. 6.4), that
official salaries were reduced in time of flood or drought. He enacted

that salaries were to be reduced proportionately each year, according to
the state of the harvest in each part of the empire (99 B: 29a, b). This
system proved cumbersome, for officials hence did not know what their
salary was to be until the year was almost over. They therefore made
various collections and exactions (24 B: 27a). When they were suspected
of having accumulated much property, in A.D. 18, Wang Mang ordered
that all but the lowest officials should be required to deliver up four-fifths
of their wealth, for the use of the army at the borders. Pan Ku
states that inquisitors galloped all over the empire, persuading slaves and
subordinates to inform on their masters or superiors (99 C: 3a). We can
imagine the limitless opportunities for blackmail and bribery, the repaying
of old scores by inquisitors and informers. In the same year, when a
serious attempt was made to put down the bandits and rebels, a levy
was made, consisting of 1/30 of all property. This levy was immediately
repeated, because property had not been assessed at its full value (99 C:
4b, 5b). All officials were also required to make additional contributions
out of their salaries, for the rearing of horses (99 C: 4b). It is not surprising
that when serious rebellion finally arose against Wang Mang, the
bureaucracy did little to stop it.

Wang Mang's fiscal policy seems to have been one of exploiting all the
sources of revenue he could find, regardless of the effect his measures had
upon the empire. While some of them mulcted the rich, other measures
burdened the poor. It is but natural that the enthusiasm for him, which
was so abundantly evident before he took the throne, should have
evaporated rapidly once he attained unchecked rule. He incurred large
and unusual expenses, which were aggravated by the corruption of his
officials. His fiscal measures show a remarkable lack of tact and a
phenomenal disregard of their effect upon the empire.

* * *

The most interesting of Wang Mang's economic experiments was the
sixth control, which he called the "Five Equalizations," by which fluctuations
of prices in staple goods were to be prevented and loans were to be
made by the government. These measures, too, had had their predecessors.

Four centuries earlier, Li K'uei, a student of Confucius' personal
disciple, Tzu-hsia, became Chancellor to Marquis Wen of Weih (reigned
424-387 B.C.) and attempted to equalize the price of grain. In good
years, the state of Wei4 purchased grain in large or small amounts according
to the state of the crop, while in poor years, it sold grain, thus attempting
to prevent fluctuations in its price (HS 24 A: 7b-8b). Unfortunately,
we are given no information concerning the success of this policy of

speculating in grain, except that it is said to have made "the state of
Weih wealthy and powerful."

This policy was again tried in 54 B.C., when Keng Shou-ch'ang, the
Palace Assistant Grand Minister of Agriculture under Emperor Hsüan,
built Constantly Equalizing Granaries in the border commanderies.
These granaries purchased grain when its price was low and sold it when
the price was high (24 A: 19b). Granaries were not built at the imperial
capital, probably because irrigation had eliminated bad seasons in that
region. These Constantly Equalizing Granaries seem to have become
sources of expense rather than of benefit to the people; they were abolished
by Emperor Yüan in 44 B.C., ten years after being built, in a fit of imperial
economy, when other expensive government projects were also
abolished, such as the imperial ateliers for silk and metal manufacture
and the government monopolies of salt and iron (9: 6a, b; 24 A: 20a).

When moreover, in 115 B.C., Emperor Wu needed money, Sang Hung-yang,
an official who had come from a mercantile family, suggested speculation
in goods. Prices differed widely in different parts of the empire;
Sang Hung-yang had the government purchase goods where they were
cheap and transport them to places where they were dear, thus making a
profit (24 B: 19b). Since the government had built roads and set up a
system of posts, and since criminals sentenced to penal servitude could
be used to supply the necessary labor, the government had an advantage
over private traders and could make great profits in this manner. The
system also prevented undue fluctuations in prices; when prices rose in
one region, goods were brought in from other places. We are not told
that this system was abolished. It was complained of in 81 B.C., but
not abolished; probably the increasing freedom of intercourse led to an
approximate equalization of prices in different regions, so that this method
of equalization became unprofitable and gradually ceased to function.
At least we hear nothing of it after the reign of Emperor Chao. Wang
Mang directed the Masters in Charge of the Five Equalizations to neglect
prices at other markets (24 B: 24b), so that in his time the government
had plainly ceased to transport goods.

Liu Hsin1a, who brought the Chou Offices to people's attention and induced
Wang Mang to make it an officially recognized classic, pointed out
to Wang Mang that the Chou dynasty, according to this classic, had a
government Office for Money (24 B: 23b). This book recounts that
in the Chou period there was an office for the collection of goods unsold
in the market-place of the capital and for their storage until people wished
to buy them. There was also an office which lent money without interest
for a period of three months to people who needed it for ancestral sacrifices

or mourning ceremonies, after which time, they paid 10% interest per year
(Chou-li 15: 3b f; Biot, I, 326-328; HS 24 B: n. 23.6, 23.8). The Yo-yü
(now lost), which was a commentary on the Classic of Music, told of an
institution called the Five Equalizations, by which prices were stabilized,
probably for the five fundamental commodities (HS 24 B: 23b & n. 23.9).
It is impossible to tell whether these measures had ever been actually
put into practise; they were very likely the inventions of Confucians who
were idealizing the past.

When Wang Mang came to the throne in A.D. 9, he accordingly established
offices for lending and for the Five Equalizations. At the imperial
capital and at five other large cities in the empire, Lo-yang, Han-tan,
Lin-tzu, Yüan, and Ch'eng-tu, there were set up Masters in Charge of
the Five Equalizations at the Markets, each with five Assistants for Exchange
and one Assistant for the Office for Money. Storehouses were
built at these places. In the middle of each quarter, the Master at each
market was to determine a price for equalization for each of three grades
of goods (high, middle, and low). These prices were to apply to the five
kinds of grains (hemp and similar seeds, glutinous millet, panicled millet,
wheat, and beans), linen cloth and silk cloth, thread, and wadding.
When any of these goods remained unsold in the market (as they were
brought in by farmers), the office for equalization was to buy them at
cost or at the market price (provided that price was lower than the price
for equalization), so that the people would lose nothing by being compelled
to receive a lower price in the market. When the price rose above
the price for equalization by one cash, the office for equalization was to
sell its goods at the price for equalization. Fluctuations of prices in the
market were thus to be prevented, merchants were not to be allowed to
corner goods or fleece the country people, and the farmers were to be
assured of a market for their goods.

People who needed money for sacrifices or for mourning ceremonies
were to have what they needed lent them, from the payments of the
income-tax, without interest for ten days or three months, respectively.
Others who needed money for working capital were to be given loans,
paying interest at 3% per month.

It was an interesting and idealistic experiment. Hu Shih says that
Wang Mang's exposition of his monopolies and of the Five Equalizations
was "the earliest conscious statement of the theory of state socialism in
the history of the social and political thought of mankind" (JNChRAS,
59 [1928]: 229). How far that statement is true may be gaged from the
information here given. The credit for this experiment should not however
be given to Wang Mang, but to the Confucian author of the passage

in the Chou Offices dealing with these matters, and in some degree to Liu
Hsin1a.

Rich merchants were selected to operate these offices. Few others
would be capable of controlling, without great loss, offices essentially
intended for speculating in goods and lending money. Pan Ku says that
these merchants communicated their wickedness to various places in the
empire and made many false accountings; that the offices and storehouses
for goods were not filled (24 B: 25b). If they had been well stocked with
goods, their very presence would have kept prices down, without actually
purchasing any more goods, until a scarcity arose. Since however these
storehouses were not filled, and since they utterly failed to prevent the
rise of prices in time of famine (99 C: 16a), this attempt to control prices
probably achieved very little, except for providing certain sinecure positions
in the bureaucracy.

It is not difficult to discover the reason that this attempt to speculate
in goods had only slight economic effects. If the price for equalization
was set too high, the storehouses would be filled with goods unsalable at
the current price. Hence the Masters, to protect their offices from losing
money, probably set their prices for equalization low, with the result
that they refused to take goods from the common people, because the
current price was too high. Then farmers would not bring their goods
to the storehouses except under stress of necessity. We are told that the
storehouses remained empty.

When a scarcity was impending, the grain remaining in these storehouses
was probably sold rapidly, before famine actually arrived, for
goods had to be sold at the price for equalization plus one cash. In
times of abundant harvest, because the prices for equalization were set
every quarter, these prices decreased before the harvest was reaped, since
grain was expected to become plentiful. Thus the farmers were not
helped, unless there was a sudden and unexpected fall in prices, such as
that caused by a glut on the market. Such gluts were perhaps the only
economic situations in which farmers were regularly benefited. The
Masters knew that Wang Mang needed money, and they undoubtedly
looked upon the storehouses as means of making profits, just as with the
other monopolies. They did not accordingly dare to risk a loss. The
Masters were former merchants, who hence took the same attitude to the
farmers that the merchants did. It is therefore only natural that the
farmers should not have been greatly benefited.

The loans made to needy persons were to be taken out of the payments
for income-taxes made by professional men. We are not told how much
money was loaned. The rate of interest, 3% per month, was however

much higher than the usual commercial rate, which was 20% per year
(91: 6a), so that few loans were probably made, except for short terms,
for which periods the commercial rate was probably also high. There
was furthermore a provision that the borrower was not to pay more than
10% of his net income as interest, so that the Masters probably refused
to make large loans. These storehouses and lending agencies benefited
few except their managers.

Their purpose was undoubtedly good—that of preventing exploitation
of the farmers by the merchants. In view of the fact that the Chinese
state had been carrying on at least two businesses (the manufacture and
sale of salt and iron) for several centuries, Wang Mang's measures can
hardly be called state socialism or revolutionary. The Five Equalizations
was merely another measure to benefit the people, advocated by the
Confucians with the same motive as the ching system and other economic
plans.

This motive on the part of the Confucians who first invented these
proposals does not however mean that Wang Mang had any strong urge
to benefit the people. His chief purpose was undoubtedly to follow Confucian
tradition—the practise by which he first secured his popularity and
as a result of which he was able to ascend the throne. He was morally
obligated to put Confucian policies into practise. Had he really been
deeply concerned for the people, he would have removed the monopolies
on salt and iron, which pressed most severely upon them. But he showed
no inclination to do so; on the contrary, he dismissed any official who
manifested an inclination even to relax these monopolies.

* * *

Wang Mang was in no sense a revolutionist. He was merely a clever
intriguer, who found a new way of gaining popular approval and who
clung to it tenaciously. He achieved the throne by playing upon the
Confucian attitude of the educated class and becoming a whole-hearted
Confucian. Confucianism is an idealistic philosophy that sought to
benefit the whole people, and the Confucian literati were in close touch
with the common people of their own clans, so that they largely reflected
the attitude of the common people to the government. When Wang
Mang actually came to the throne, he proceeded to enact various Confucian
proposals, but his decrees were not based upon a clear knowledge of
the people or of their needs.

He had passed his life as a member of the governing clan, which
gained wealth and position merely because it was related to the reigning
Emperor. He made his way to leadership by intrigue and secured popularity
by espousing the popular Confucian religion of the educated class.

When chance made him the dictator of the government and regent for an
infant, people found no difficulty in interpreting Confucian teachings so
that they were thought to require his enthronement. He then had to
put into practise the economic policies embodied in the Confucian tradition,
including the particular Confucian books he had newly accepted as
authoritative.

His economic policies proceeded from the Confucian tradition, not
from any need of the people. His forced colonization of Kokonor (99 A:
24b) and his increased taxation demonstrate his utter callousness to the
real needs of the people. His changes in the coinage were a means of
mulcting the merchants and moneyed class. His nationalization of land,
the establishment of the ching system, the restrictions on large holdings
of land and on slaves proved onerous even to his own relatives and followers.
These measures were therefore quickly rescinded, even though
they were in accord with Confucian tradition and would have proved
helpful to the common people.

The first four monopolies were plainly means of seizing for the government
the most profitable private enterprises, a procedure that had long
been a government policy. It was especially oppressive under Wang
Mang, because he added to the number of enterprises taken over by the
government and to the severity of the punishments for offending against
these monopolies. They put added burdens upon the poorer people,
virtually taxing necessities. The fifth monopoly was clearly directed
against the poorer people and was in effect a direct tax on certain occupations.
The Five Equalizations, an attempt to stabilize prices and make
loans to those who needed them, was inexpertly planned and failed to
achieve anything of note. Thus Wang Mang's economic policies were
either futile or oppressive in their operation. He seems to have oppressed
all the economic classes in the empire.

When, in the winter of A.D. 22, the whole empire was in rebellion and
Wang Mang at last realized the extremity of the situation, it was decided
to rescind all the imperial edicts and ordinances that had been made since
he had ascended the throne, especially the economic reforms we have
been discussing. Messengers were prepared to be sent out (99 C: 19b).
Such an act would have meant a drastic loss of face. The imperial
forces, however, achieved a preliminary minor success, and the messengers
were not actually dispatched. Such a drastic proposal is evidence that
Wang Mang was at last driven to recognize the unpopularity of his
economic reforms. Thereafter events happened too rapidly. The rebels
continued to gain, and by October of the next year, the capital had been
captured and Wang Mang killed by the people of the capital itself. Thus

his phenomenal popularity changed within fifteen years into the most
bitter hatred. His economic measures must bear much of the blame for
that reversal of public opinion.[12] (Reproduced by permission, with
omissions and additions, from an article with the same title in the T'oung
Pao, vol. 35, [1940], Livr. 4, pp. 219-265.)